What is Life Insurance?
Let us proceed first to establish the etymological origin of the two central words that shape the term that occupies us in order to better understand its meaning. Thus, the word safe comes from the Latin word securus which can be translated as “tranquil”. Meanwhile, life also emanates from the Greek, more precisely from the noun bios which is synonymous with “life”.
The life insurance seeks to guarantee the protection of persons which the insured is responsible. In the event of the death of the beneficiary or heirs, they are entitled to compensation.
This indemnity is called insured capital and can be paid in a single time or as a financial income. Generally, the beneficiaries are the relatives of the insured, although they can also be their partners or creditors.
The reasons that lead many people to choose to take out the best cheap life insurance are circumstances such as whether their family is financially dependent or their pension is very low and, in the event of their death, their children and spouses could not that. Reasons that are also taken into account to the contrary, not to hire this insurance. Thus, it is established that people who are single or have no family responsibilities do not need it.
Life insurance can be classified according to its duration (temporary or whole life), its type of premium (at premium level, where payment is constant, and risk premium, where increases according to the age of the insured) or The number of insured persons covered by the policy (individual, collective or multi-head insurance).
Insurers say that, thanks to the combination of foresight and solidarity of the system, the insured gets immediate coverage for important amounts, even though individual contributions are reduced.
The age of his partner and his children as well as the rest of the people who depend on the insured, if any of their members are disabled, the number of people who are supported by the salary of the same or the economic amount necessary for them You can get ahead are some of the parameters that have to be taken into account when choosing a life insurance or another.
In the same way, it is also important that the individual who is clear that he wants to take out life insurance should keep in mind other factors of great importance such as, for example, the reliability of the insurance company.
In some countries, such as the United States, life insurance is not only a source of income replacement, but also allows you to pay off the balance of the mortgage or other debts at the time of death of the insured; Pay inheritance taxes; Pay funeral expenses; Provide funds for the education of descendants; And even making charitable donations.
On the other hand, there are policies that even allow the insured to benefit in life, for example supplementing retirement (when someone who pays life insurance for many years and reaches old age without having to worry about the economic well-being of his family).